Dow Jones Newswires | AAR Corp. predicted fiscal fourth-quarter earnings below Wall Street’s
expectations, but forecast higher revenue, citing a slower-than-expected
recovery in demand in its commercial aviation business.

Shares dropped 9 percent to $20.05 in after-hours trading. The stock is flat
this year.

The aircraft-leasing and maintenance company expects earnings of 25
cents to 30 cents on revenue of $355 million to $365 million, while
analysts estimated 38 cents and $340 million, respectively, according to
a poll by Thomson Reuters.

Wood Dale-based AAR also said earnings will be reduced by 2 cents a share because of one-time costs related to a business acquisition.

“While we have seen signs of recovery in some of our businesses that support commercial aviation, we expected a more meaningful pickup in our parts business, which has not yet materialized,” said Chairman and Chief Executive David Storch.

The company expects stronger cash flow from operations for the fourth quarter compared with the third quarter.

AAR, which reported a 42 percent drop in third-quarter profit, has suffered as airlines cut inventories and maintenance in response to weak travel demand and tight credit. However, sales to defense customers have remained strong.